NCR Corporation, an enterprise technology provider to banks, retailers, and restaurants, announced its Board of Directors has unanimously approved a plan to separate NCR into two independent, publicly traded companies, one focused on digital commerce, the other on ATMs. The separation is intended to be structured in a tax-free manner and is targeted for the end of 2023.
Company officials stated that by creating two independent companies, they should be able to accelerate the pace of transformation by enabling each to execute its own growth strategies and better capture the value-creation opportunities ahead. In recent days, it has become increasingly clear to the Board that, given the state of current financing markets, they cannot deliver a whole company transaction that reflects an appropriate and acceptable value for NCR to their shareholders.
The digital commerce company will be a growth business positioned to leverage NCR’s software-led model to continue transforming, connecting, and running global retail, hospitality, and digital banking. It will maximise common solutions to drive innovation and boost operational efficiency. The company will also reinvest in the business to accelerate growth and recurring revenue.
The ATM company will be a cash-generative business positioned to focus on delivering ATM-as-a-Service to a large, installed customer base across banks and retailers. It will build on NCR’s leadership in self-service banking and ATM networks to meet global demand for ATM access and leverage new ATM transaction types, including digital currency solutions, to drive market growth. The company will also continue shifting to a highly recurring revenue model to drive stable cash flow and capital returns to shareholders.
Representatives of NCR further added that the separation would create two strong companies at scale, each with distinctive business goals and capital structures and allocation, as well as increased flexibility to innovate. Each company can simplify its operations and focus on what it does best, and because they will have different growth profiles and economic models, separating them will also provide investors with greater transparency and a better ability to value each of the businesses.
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